Rise in Sized Bitcoin Transactions Hints Institution Buildup

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A recent news report shows several important Bitcoin transactions this year.

There is some evidence to suggest an increase in purchases by institutional investors.

Since the start of the year, two big names in finance have admitted to holding BTCs as protection against the inflation of fiat currencies.

The Trust Project is an international consortium of news organizations based on transparency standards.

Bitcoin Flash Crash

On-chain data shows that the major players in the Bitcoin market became more active after the March 2020 price crash, as well as during periods of consolidation this summer. This may suggest a model of accumulation by “whales” and / or institutions.

Anyone who has followed the evolution of cryptocurrency in recent years is no doubt familiar with the respect the industry has for institutional investors. The popular belief is that when the biggest fund managers on the planet enter the cryptocurrency market, the buying pressure they generate will quickly inflate the prices of all digital assets.

Already this year, a number of leading players have admitted to holding BTC to hedge against inflation. Among them are legendary hedge fund manager Paul Tudor Jones and NASDAQ-listed business analysis firm Microstrategy.

Do institutions really accumulate BTC?

A recent report by OKEx Insights, drew on on-chain data provided by Catallact, in order to analyze the most important Bitcoin transactions to draw conclusions on the activity of the institutional BTC market. Two major spikes in the number of sizable transactions, in particular, lead the report’s authors to conclude that institutional investors are likely accumulating Bitcoin.

The report observes that the smallest retail transactions (0 to 1 BTC), vaguely track Bitcoin’s price – when Bitcoin is in frequent purchase, retail transactions are more numerous.

Conversely, in cases of sharp declines like March 2020, we see a decrease in the number of small transactions. The report suggests that retail investors took a “wait and see” approach when BTC collapsed in the wake of the global market downturn caused by the onset of the COVID-19 pandemic. A similar trend emerged when Bitcoin’s price returned to the $ 10,000 level at the time of its third halving.